Filene’s Sold (Again)
Syms wins the right to buy the bankrupt retailer; former bidding partner Vornado Realty Trust’s role now unclear.
June 16, 2009
For the second time in very recent memory, Filene’s Basement has been sold. The discount, now bankrupt, retailer was sold to Syms, another retailer, in a second auction that began last week after Men’s Wearhouse, the winner of the initial auction, did not follow through on its bid.
A Syms spokesman declined to comment; oddly, the retailer had previously been revealed to be bidding for Filene’s assets along with Vornado Realty Trust, which, it was expected, would own and manage the real estate assets of the bankrupt retailer. However, the statement in which Syms declared itself the auction winner had no mention of Vornado; the spokesman refused to say even whether or not Vornado was a participant in the deal Syms said it will complete.
It remains unclear whether Vornado has any role whatsoever. The listed, New Jersey-based real estate company did not respond to comments by press time. Filene’s Basement officials could not be reached.
Because Vornado’s presence in the auction was not clarified, it is also questionable whether Syms will keep all of Filene’s locations open, or just some select areas. The Syms statement said that it will complete the “acquisition of the vast majority of the current operating Filene's Basement store leases.” Syms paid around $63 million for the retailer, about $4 million less than what was proposed by Men’s Wearhouse before that bidder backed away from its deal.
Bankruptcy auctions have proceeded with anything but regularity in 2009. KPS Capital, initially announced as winner of the bankrupt Lenox Group auction in March, was bumped by Clarion Partners. Patriarch Partners’ Polaroid play was pushed aside by a lower bid by Hilco Consumer Capital and Gordon Brothers a month later and Wayzata Capital Investment Partners thought it had sealed an all-cash transaction to buy Foamex International in May. However, the judge overseeing the bankruptcy reopened the bidding and MatlinPatterson and Black Diamond Capital Management walked away with the prized asset.
A hearing to authorize the debtor to enter into Syms' asset purchase agreement is scheduled to be conducted by the bankruptcy court after the close of business on June 17. The Men’s Wearhouse play seemed to fit in with that company’s strategic method of buying companies at times when assets were strained; previous deals included buys of C&R Clothiers, Canadian Moores Retail Group Inc., K&G Men's Center, Inc., and Federated Department Stores' After Hours Formalwear division.
Advisors to Filene's Basement include legal counsel Pachulski, Stang, Ziehl & Jones LLP, along with Alan Cohen, its chief restructuring officer.
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